8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 12, 2016

VAPOR HUB INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

Nevada

 (State or other jurisdiction of incorporation)

000-55363	27-3191889
(Commission File Number)	(IRS Employer Identification No.)

1871 Tapo Street

Simi Valley, CA 93063

(Address of Principal Executive Offices)(Zip Code)

Registrant’s telephone number, including area code (805) 309-0530

N/A

 (Former Name or Former Address, if Changed Since Last Report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

Amendment to Note Settlement Agreement

On May 12, 2016 but effective as of April 15, 2016, Vapor Hub International Inc. (the “Company”) entered into Amendment #2 to Note Settlement Agreement (the “Settlement Agreement Amendment”) with Typenex Co-Investment, LLC (the “Investor”). The Settlement Agreement Amendment relates to the Note Settlement Agreement entered into between the parties on December 18, 2015, as previously amended on February 19, 2016 (as previously amended, the “Original Agreement”).

The Original Agreement, as amended by the Settlement Agreement Amendment, relates to the Secured Convertible Promissory Note issued on November 4, 2014 in the original principal amount of $1,687,500.00 (the “November Note”) pursuant to that certain Securities Purchase Agreement dated November 4, 2014 by and between the Investor and the Company (the “November Purchase Agreement”, and together with the November Note and all other documents entered into in conjunction therewith, the “November Transaction Documents”). The Original Agreement, as amended, also relates to the Promissory Note issued on June 4, 2015 in the original principal amount of $245,000.00 (the “June Note”, and together with the November Note, the “Notes”) pursuant to that certain Note Purchase Agreement dated June 4, 2015 (the “June Purchase Agreement” and together with the June Note and all other documents entered into in conjunction therewith, the “June Transaction Documents” and together with the November Transaction Documents, the “Transaction Documents”).  

The Original Agreement, as amended by the Settlement Agreement Amendment, restructures the payment provisions of the Notes.  The Settlement Agreement Amendment restructures the payment provisions contained in the Original Agreement and provides that the Company is to make the following payments to Investor notwithstanding the terms of the Notes (the “Restructure”): (a) a cash payment in the amount of $35,000.00 payable on or before April 15, 2016 together with 3,160,556 shares of the Company’s common stock (subject to adjustment as described in the Settlement Agreement Amendment) based on a note conversion amount of $50,000.00 and a conversion price of $0.015820, which shares are to be issued and delivered pursuant to the terms of the Settlement Agreement Amendment and (b) a cash payment on or before May 15, 2016 in the amount of $35,000.00 together with shares of the Company’s common stock based on a note conversion amount of $50,000.00 and a conversion price to be determined in accordance with the Notes, which shares are to be issued and delivered pursuant to the terms of the Settlement Agreement Amendment; and (c) a payment equal to the remaining aggregate outstanding balance of the Notes on or before June 15, 2016, which payment must be made in cash (collectively, the “Note Payments”). Unless specified otherwise by Investor in a written notice delivered to Company, all Note Payments shall be applied first against the outstanding balance of the November Note until the November Note has been paid in full and thereafter against the June Note until the June Note is paid in full.  The Settlement Agreement Amendment also provides that outstanding balance on each of the November Note and the June Note will bear interest at the rate of 10% per annum from the effective date of the amendment until such notes are repaid in full; previously, the June Note did not accrue interest on the unpaid principal balance of the note unless an event of default occurred.

As consideration for Investor’s agreement to enter into the Settlement Agreement Amendment, the Company agreed to pay Investor a restructuring fee of $15,315.86.

Upon satisfaction of the Company’s obligations under the Original Agreement, as amended, the Company shall be deemed to have paid the entire outstanding balance of the Notes in full and shall have no further obligations under either Note. In addition, subject to the Company’s compliance with the terms and conditions of the Note Settlement Agreement, the Investor waives the default caused by the non-payment of the June Note on December 4, 2015.  

In the event that the Company fails to comply with the conditions of the Original Agreement, as amended by the Settlement Agreement Amendment, the Restructure, the waiver of the June Note default, and all other accommodations given in the Original Agreement, as amended, will be deemed withdrawn and the Investor will be entitled to all remedies available to it as provided in the Notes, the other Transaction Documents, and the Original Agreement, as amended.

As of the date of this report, the outstanding balance on the November Note is $0 and the outstanding balance on the June Note is $84,363.25 (which takes into account a cash payment of $35,000 made on May 11, 2016).

2

Entry into Exchange Agreement and Issuance of Convertible Promissory Note

On May 12, 2016 but effective as of April 15, 2016, the Company entered into an Exchange Agreement with Iliad Research and Trading L.P. (“Iliad”), an affiliate of the Investor (the “Exchange Agreement”).  The Exchange Agreement relates to the Promissory Note issued on August 12, 2015 to Iliad in the original principal amount of $245,000, as previously amended on February 19, 2016 (as amended, the “Original Note”).

Pursuant to the Exchange Agreement, the Company and Iliad exchanged the Original Note for a new promissory note in the original principal amount of $272,250.00 (the “Exchange Note”), which balance includes an exchange fee of $24,750.00.  The Exchange Note was issued in substitution of and not in satisfaction of the Original Note.

The Exchange Note provides that the Company is to make the following payments to Iliad: (a) a payment in shares of the Company’s common stock within three trading days of June 15, 2016 based on a note conversion amount of $50,000.00 and a conversion price that is equal to 70% of the average of the three lowest closing bid prices of the Company’s common stock in the twenty trading days immediately preceding such conversion, which shares are to be issued and delivered pursuant to the terms of the Exchange Note; and (b) a payment equal to the remaining aggregate outstanding balance of the Exchange Note on or before July 15, 2016, which payment must be made in cash.  On the date that is twenty trading days from the date the Company delivers the conversion shares to Iliad, there is a true-up where the Company is required to deliver additional shares if the conversion price as of the true-up date is less than the conversion price used to deliver the initial shares. Interest accrues on the outstanding balance of the Exchange Note at a rate of 10% per annum; provided, however that if the Company fails to repay the Exchange Note when due, or if the Company is otherwise in default under the Exchange Note, at the option of Iliad a default interest rate of 18% per annum will apply.  In the event the Company is in default under the Exchange Note, Iliad also has the option to accelerate the note with the outstanding balance becoming immediately due and payable at an amount equal to 115% of the outstanding balance of the Exchange Note as of the date the event of default occurred.  The Exchange Note may be prepaid without penalty.  The Exchange Note provides that the Company may not issue shares to Iliad under the Exchange Note if the issuance of such shares would cause Iliad to beneficially own more than 9.99% of the Company’s outstanding common stock.

The foregoing summaries of the Settlement Agreement Amendment, Exchange Agreement and Exchange Note do not purport to be complete and are qualified in their entirety by references to the full text of such agreements, which are attached as Exhibits 10.1, 10.2 and 10.3 hereto.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information Set forth under Item 1.01, “Entry into a Material Definitive Agreement,” regarding the Exchange Agreement and related Exchange Note is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

Pursuant to the Settlement Agreement Amendment, the Company issued to Investor 3,160,556 shares of the Company’s common stock and will be required to issue an unknown number of additional shares of common stock in accordance with the terms of the Settlement Agreement Amendment and the Exchange Note.  The shares are being issued in reliance upon the exemption from registration provided by Rule 144 of the Securities Act of 1933, as amended.  

Item 4.01 Change in Registrant’s Certifying Accountant

In connection with the reorganization of Hartley Moore Accountancy Corporation (the “Former Auditor”), its audit partners and staff have joined Hall and Company, Inc. (“Hall”). Due to the reorganization of the firm, the Former Auditor has resigned as the independent auditor of the Company, effective May 12, 2016. The Former Auditor has been the Company’s auditor since March 30, 2015.

As a result of the reorganization, the Board of Directors of the Company approved the resignation of the Former Auditor effective May 12, 2016, and the engagement of Hall as the Company’s independent registered public accounting firm for the fiscal year ended June 30, 2016 effective May 12, 2016.

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During the Company’ two most recent fiscal years ended June 30, 2014 and 2015 and through May 12, 2016, the Company did not consult with Hall on (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that may be rendered on the Company’s financial statements, and Hall did not provide either a written report or oral advice to the Company that Hall concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) the subject of any disagreement, as defined in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions, or a reportable event within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.

The audit reports of the Former Auditor on the financial statements of the Company as of and for the fiscal years ended June 30, 2014 and 2015 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.

During the Company’ two most recent fiscal years ended June 30, 2014 and 2015 and through May 12, 2016, there were: (i) no disagreements between the Company and the Former Auditor on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of the Former Auditor, would have caused the Former Auditor to make reference to the subject matter of the disagreement in their reports, and (ii) no reportable events within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.

The Company has provided the Former Auditor a copy of the disclosures in this Form 8-K and has requested that the Former Auditor furnish it with a letter addressed to the Securities and Exchange Commission stating whether or not the Former Auditor agrees with the Company’s statements in this Item 4.01. A copy of the letter dated May 12, 2016, furnished by the Former Auditor in response to that request is filed as Exhibit 16.1 to this Form 8-K.

Item 9.01

Financial Statements and Exhibits

(d)

Exhibits.

The following exhibits are filed herewith:

Exhibit Number	Description of Exhibit
10.1	Amendment #2 to Note Settlement Agreement entered into on May 12, 2016 but effective as of April 15, 2016 by and between Vapor Hub International Inc. and Typenex Co-Investment, LLC.
10.2	Exchange Agreement entered into on May 12, 2016 but effective as of April 15, 2016 by and between Vapor Hub International Inc. and Iliad Research and Trading, L.P.
10.3	Form of Convertible Promissory Note issued by Vapor Hub International Inc. on April 15, 2016 in favor of Iliad Research and Trading, L.P.
16.1	Letter to Securities and Exchange Commission from Hartley Moore Accountancy Corporation dated May 12, 2016.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		VAPOR HUB INTERNATIONAL INC.
Date:	May 18, 2016	By:	/s/ Lori Winther
			Lori Winther
			Chief Financial Officer

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EX-10

AMENDMENT #2 TO NOTE SETTLEMENT AGREEMENT

This Amendment #2 to Note Settlement Agreement (this “Amendment”) is executed as of May 12, 2016, but is effective for all purposes as of April 15, 2016 (the “Effective Date”), by and between TYPENEX CO-INVESTMENT, LLC, a Utah limited liability company (“Lender”), and VAPOR HUB INTERNATIONAL INC., a Nevada corporation (“Borrower”). Capitalized terms used in this Amendment without definition shall have the meanings given to them in that certain Note Settlement Agreement dated December 18, 2015 entered into by and between Lender and Borrower (as amended, the “Settlement Agreement”).

A.

Borrower previously sold and issued to Lender that certain Secured Convertible Promissory Note issued on November 4, 2014 in the original principal amount of $1,687,500.00 (the “November Note”) pursuant to that certain Securities Purchase Agreement dated November 4, 2014 by and between Lender and Borrower (the “November Purchase Agreement,” and together with the November Note and all other documents entered into in conjunction therewith, the “November Transaction Documents”).  

B.

Borrower also previously sold and issued to Lender that certain Promissory Note dated June 4, 2015 in the original principal amount of $245,000.00 (the “June Note,” and together with the November Note, the “Notes”) pursuant to that certain Note Purchase Agreement dated June 4, 2015 by and between Lender and Borrower (the “June Purchase Agreement,” and together with the June Note and all other documents entered into in conjunction therewith, the “June Transaction Documents”). The June Transaction Documents and the November Transaction Documents are collectively referred to herein as the “Transaction Documents.”

C.

On December 18, 2015, Borrower and Lender entered into the Settlement Agreement, pursuant to which they agreed to restructure and settle the Notes on the terms set forth therein.

D.

Effective as of February 19, 2016, Borrower and Lender entered into that certain Amendment to Note Settlement Agreement (the “Prior Amendment”) pursuant to which, among other modifications, Borrower and Lender agreed to modify the payment schedule set forth in the Settlement Agreement.

E.

Borrower has again requested that Lender alter the terms of the payment schedule set forth in the Settlement Agreement (the “Revised Payment Schedule”).

F.

Lender has agreed, subject to the terms, amendments, conditions and understandings expressed in this Amendment, to amend the Settlement Agreement to reflect the Revised Payment Schedule.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.

Recitals. Each of the parties hereto acknowledges and agrees that the recitals set forth above in this Amendment are true and accurate and are hereby incorporated into and made a part of this Amendment.

2.

Revised Payment Schedule. Section 2 of the Settlement Agreement is deleted in its entirety and replaced with the following:

“Note Payments. Notwithstanding the terms of the Notes, Borrower covenants and agrees to make the following payments to Lender (the “Restructure”): (a) a cash payment in the amount of $35,000.00 together with shares of Common Stock (as defined in the November Note) based on a Conversion Amount (as defined in the November Note) of $50,000.00 (the “First Note Payment Conversion Amount”), delivered subject to the terms and conditions set forth below, with such cash payment received by Lender on or before April 15, 2016 and the shares of Common Stock received by Lender within three (3) Trading Days thereof; (b) a cash payment in the amount of $35,000.00 together with shares of Common Stock based on a Conversion Amount of $50,000.00 (the “Second Note Payment Conversion Amount”, and together with the First Note Payment Conversion Amount, the “Note Payment Conversion Amounts”), delivered subject to the terms and conditions set forth below, with such cash payment received by Lender on or before May 15, 2016 and the shares of Common Stock received by Lender within three (3) Trading Days thereof; and (c) a payment equal to the remaining aggregate Outstanding Balance of the Notes on or before June 15, 2016, which payment must be made in cash (collectively, the “Note Payments”). Unless specified otherwise by Lender in a written notice delivered to Borrower (which notice Lender may provide in its sole and absolute discretion), all Note Payments shall be applied first against the Outstanding Balance of the November Note until the November Note has been paid in full and thereafter against the Outstanding Balance of the June Note until the June Note has been paid in full. Borrower’s delivery of shares of Common Stock (“Payment Shares”) in connection with the Note Payment Conversion Amounts shall be subject to the following conditions: (i) Lender shall provide to Borrower a Conversion Notice for each Note Payment Conversion Amount that will set forth its calculation of the number of Payment Shares deliverable to Lender with respect to such Note Payment Conversion Amount; (ii) the number of Payment Shares deliverable with respect to each Note Payment Conversion Amount shall be equal to the applicable Note Payment Conversion Amount divided by the then-current Installment Conversion Price (as calculated pursuant to Section 8.1 of the November Note); (iii) all Payment Shares must be delivered in the manner and in accordance with the timeframe set forth in Section 9 of the November Note; (iv) the applicable shares of Common Stock must have been received by Lender or its broker, as applicable, and become Free Trading (as defined below) on or before the applicable due date for such portion of the applicable Note Payment to be deemed to have been timely made; and (v) on the date that is twenty (20) Trading Days from each date Borrower delivers Free Trading shares of Common Stock to Lender, there shall be a true-up where Borrower shall deliver to Lender additional shares of Common Stock on the terms and in the manner set forth in Section 11 of the November Note, provided that for purposes hereof, all references to “Installment Conversion Shares” shall be deemed to refer to Payment Shares. For the avoidance of doubt, the conditions for payments of the

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Note Payment Conversion Amounts via Payment Shares set forth above in this Section 2 shall apply to Note Payments made with respect to both the November Note and the June Note and to the extent any necessary term related to the payment of a Note Payment Conversion Amount via Payment Shares is not addressed in this Agreement (or in the June Note), but is addressed in the November Note, the provision of the November Note shall apply (provided that if there is any conflict between a term set forth herein and a term set forth in the November Note, this Agreement shall govern), even if the November Note has been paid in full. For purposes hereof, the term “Free Trading” means that (y) the applicable Payment Shares have been cleared and approved for public resale by the compliance departments of Lender’s brokerage firm and the clearing firm servicing such brokerage, and (z) such Payment Shares are held in the name of the clearing firm servicing Lender’s brokerage firm and have been deposited into such clearing firm’s account for the benefit of Lender.”

3.

Restructure Fee. In consideration of Lender’s agreement to implement the Revised Payment Schedule, its fees incurred in preparing this Amendment and other accommodations set forth herein, Borrower agrees to pay to Lender a restructure fee in the amount of $15,315.86 (the “Restructure Fee”). $2,390.86 of the Restructure Fee shall be added to the outstanding balance of the November Note and $12,925.00 of the Restructure Fee shall be added to the outstanding balance of the June Note. Lender and Borrower acknowledge and agree that (a) the outstanding balance of the November Note as of the date hereof and immediately following the application of the Restructure Fee is $26,306.15, and (b) the outstanding balance of the June Note as of the date hereof and immediately following the application of the Restructure Fee is $142,175.00.

4.

Interest. Borrower acknowledges and agrees that interest will accrue on the outstanding balance of each of the November Note and the June Note at the rate of ten percent (10%) per annum for the period beginning on the Effective Date of this Amendment and ending on the date that each applicable Note is paid in full (i.e., upon repayment in full of the outstanding balance of the November Note, interest will continue to accrue on the outstanding balance of the June Note until the June Note is paid in full).

5.

Representations and Warranties. In order to induce Lender to enter into this Amendment, Borrower, for itself, and for its affiliates, successors and assigns, hereby acknowledges, represents, warrants and agrees as follows:

(a)

Borrower has full power and authority to enter into this Amendment and to incur and perform all obligations and covenants contained herein, all of which have been duly authorized by all proper and necessary action. No consent, approval, filing or registration with or notice to any governmental authority is required as a condition to the validity of this Amendment or the performance of any of the obligations of Borrower hereunder.

(b)

There is no fact known to Borrower or which should be known to Borrower which Borrower has not disclosed to Lender on or prior to the date of this Amendment which would or could materially and adversely affect the understanding of Lender expressed in this Amendment or any representation, warranty, or recital contained in this Amendment.

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(c)

Except as expressly set forth in this Amendment, Borrower acknowledges and agrees that neither the execution and delivery of this Amendment nor any of the terms, provisions, covenants, or agreements contained in this Amendment shall in any manner release, impair, lessen, modify, waive, or otherwise affect the liability and obligations of Borrower under the terms of the Settlement Agreement.

(d)

Borrower has no defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims, actions or causes of action of any kind or nature whatsoever against Lender, directly or indirectly, arising out of, based upon, or in any manner connected with, the transactions contemplated hereby, whether known or unknown, which occurred, existed, was taken, permitted, or begun prior to the execution of this Amendment and occurred, existed, was taken, permitted or begun in accordance with, pursuant to, or by virtue of any of the terms or conditions of the Settlement Agreement. To the extent any such defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims, actions or causes of action exist or existed, such defenses, rights, claims, counterclaims, actions and causes of action are hereby waived, discharged and released. Borrower hereby acknowledges and agrees that the execution of this Amendment by Lender shall not constitute an acknowledgment of or admission by Lender of the existence of any claims or of liability for any matter or precedent upon which any claim or liability may be asserted.

(e)

Borrower represents and warrants that as of the date hereof no breaches exist under the Settlement Agreement or have occurred prior to the date hereof.

6.

Certain Acknowledgments. Each of the parties acknowledges and agrees that no property or cash consideration of any kind whatsoever has been or shall be given by Lender to Borrower in connection with any amendment to the Settlement Agreement granted herein.

7.

Other Terms Unchanged. The Settlement Agreement, as amended by the Prior Amendment and this Amendment, remains and continues in full force and effect, constitutes legal, valid, and binding obligations of each of the parties, and is in all respects agreed to, ratified, and confirmed. Any reference to the Settlement Agreement after the date of this Amendment is deemed to be a reference to the Settlement Agreement as amended by the Prior Amendment and this Amendment. If there is a conflict between the terms of this Amendment and the Settlement Agreement, the terms of this Amendment shall control. If there is a conflict between the terms of this Amendment and the Prior Amendment, the terms of this Amendment shall control. No forbearance or waiver may be implied by this Amendment. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment to, any right, power, or remedy of Lender under the Settlement Agreement, as in effect prior to the date hereof. For the avoidance of doubt, this Amendment shall be subject to the governing law, venue, and Arbitration Provisions, as set forth in the Settlement Agreement.    

8.

No Reliance. Borrower acknowledges and agrees that neither Lender nor any of its officers, directors, members, managers, equity holders, representatives or agents has made any representations or warranties to Borrower or any of its agents, representatives, officers,

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directors, or employees except as expressly set forth in this Amendment, the Prior Amendment, the Settlement Agreement, and the Transaction Documents and, in making its decision to enter into the transactions contemplated by this Amendment, the Prior Amendment, and the Settlement Agreement, Borrower is not relying on any representation, warranty, covenant or promise of Lender or its officers, directors, members, managers, equity holders, agents or representatives other than as set forth in this Amendment, the Prior Amendment, and in the Settlement Agreement.

9.

Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. The parties hereto confirm that any electronic copy of another party’s executed counterpart of this Amendment (or such party’s signature page thereof) will be deemed to be an executed original thereof.

10.

Further Assurances. Each party shall do and perform or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Amendment and the consummation of the transactions contemplated hereby.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date set forth above.

LENDER:

TYPENEX CO-INVESTMENT, LLC

By: Red Cliffs Investments, Inc., its Manager

        TYPENEX CO-INVESTMENT, LLC

     By:

/s/ John M. Fife                            

            John M. Fife, President

BORROWER:

VAPOR HUB INTERNATIONAL INC.

By: /s/ Lori Winther        

Name: Lori Winther

Title: Chief Financial Officer

[Signature page to Amendment #2 to Note Settlement Agreement]

EX-10

THE EXCHANGE CONTEMPLATED HEREIN IS INTENDED TO COMPORT WITH THE REQUIREMENTS OF SECTION 3(a)(9) OF THE SECURITIES ACT OF 1933, AS AMENDED.

EXCHANGE AGREEMENT

THIS EXCHANGE AGREEMENT (this “Agreement”) is executed as of May 12, 2016, but is effective for all purposes as of April 15, 2016, by and between Vapor Hub International Inc., a Nevada corporation (the “Company”), and Iliad Research and Trading, L.P., a Utah limited partnership, its successors and/or assigns (“Holder”). Capitalized terms not defined herein shall have the same meaning as set forth in the Prior Note (as defined below).

A.

Pursuant to that certain Note Purchase Agreement dated August 12, 2015 (the “Purchase Agreement”) between Holder and the Company, the Company issued to Holder a certain Promissory Note in the original principal amount of $245,000.00 and having an original issue date of August 12, 2015 (as amended by that certain Amendment to Promissory Note (the “Amendment”) dated February 19, 2016, the “Prior Note”).

B.

Subject to the terms of this Agreement, Holder and the Company desire to exchange (such exchange is referred to as the “Note Exchange”) the Prior Note for a new Promissory Note in the original principal amount of $272,250.00 and substantially in the form attached hereto as Exhibit A (the “Exchange Note”). The Note Exchange will consist of Holder surrendering the Prior Note in return for the Exchange Note. Other than the surrender of the Prior Note, no consideration of any kind whatsoever shall be given by Holder to the Company in connection with this Agreement.  

C.

Pursuant to the terms and conditions hereof, Holder and the Company agree to exchange the Prior Note for the Exchange Note.

NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained, the parties hereto agree as follows:

1.

Issuance of Exchange Note. Upon execution of this Agreement, Holder will surrender the Prior Note to the Company and the Company will issue to Holder the Exchange Note. In conjunction therewith, the Company hereby confirms that the Prior Note represents the Company’s unconditional obligation to pay the outstanding balance of such Note pursuant to the terms of the Prior Note. The Company and Holder agree that upon surrender, the Prior Note will be cancelled and the remaining amount owed to Holder in consideration of the Note Exchange shall hereafter be evidenced solely by the Exchange Note.

2.

Exchange Fee; Affirmation of Outstanding Balance. The Company acknowledges that the Outstanding Balance of the Exchange Note includes an exchange fee in the amount of $24,750.00 (the “Exchange Fee”), which sum was added to the Outstanding Balance of the Exchange Note in consideration of the accommodations granted to the Company and the legal and other fees incurred by Holder in connection with the Note Exchange. Holder and the Company acknowledge and agree that the Outstanding Balance of the Exchange Note upon its issuance, including the application of the Exchange Fee, is $272,250.00.

3.

Closing Date; Deliveries. The closing of the transaction contemplated hereby (the “Closing”) along with the delivery of the Prior Note and the other Exchange Documents (as defined below) shall occur on the date that is mutually agreed to by the Company and Holder (the “Closing Date”) by means of the exchange by express courier and email of .pdf documents, but shall be deemed to

have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah. On the Closing Date, prior to or contemporaneously with the execution and delivery of this Agreement, the following events shall occur:

3.1.

The Company shall execute and deliver to Holder the Secretary’s Certificate (as defined below).

3.2.

The Company shall issue the Exchange Note to Holder.

3.3.

Mutual delivery of all other Exchange Documents, including without limitation this Agreement.

3.4.

Holder shall deliver the Prior Note to the Company for cancellation.

4.

Holding Period, Tacking and Legal Opinion. The Company represents, warrants and agrees that for the purposes of Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended (the “Securities Act”), the holding period of the Exchange Note will include the holding period of the Prior Note from August 12, 2015, which date is the date that the Prior Note was issued. The Company agrees not to take a position contrary to this Section 4 in any document, statement, setting, or situation and further acknowledges that, other than with respect to the Amendment, the Prior Note has not been amended or altered since such date. The Company represents that it has ceased to be an issuer described in Rule 144(i)(1)(i). The Exchange Note is being issued in substitution of and exchange for and not in satisfaction of the Prior Note. The Exchange Note shall not constitute a novation or satisfaction and accord of the Prior Note. The Company acknowledges and understands that the representations and agreements of the Company in this Section 4 are a material inducement to Holder’s decision to consummate the transactions contemplated herein.

5.

Representations, Warranties and Covenants of Holder. Holder represents, warrants, and covenants to the Company that:

5.1.

Investment Purpose. Holder is acquiring the Exchange Note for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, Holder reserves the right to dispose of any Conversion Shares (as defined in the Exchange Note) (together with the Exchange Note, the “Securities”) issued thereunder at any time in accordance with or pursuant to an effective registration statement covering such Conversion Shares or an available exemption under the Securities Act.  

5.2.

Accredited Investor Status. Holder is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D of the Securities Act.

5.3.

Authorization, Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of Holder and is a valid and binding agreement of Holder enforceable in accordance with its terms.

5.4.

Brokers. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by Holder in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with Holder or any action taken by Holder.

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6.

Representations, Warranties, and Covenants of the Company. The Company hereby makes the representations set forth below and covenants and agrees as follows to Holder (in addition to those set forth elsewhere herein):

6.1.

Organization and Qualification. The Company has been duly organized, validly exists and is in good standing under the laws of the State of Nevada.  The Company has full corporate power and authority to enter into this Agreement and this Agreement has been duly and validly authorized, executed and delivered by the Company and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforcement may be limited by the United States Bankruptcy Code and laws effecting creditors’ rights, generally.

6.2.

Authorization, Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, the Exchange Note, and each of the other Exchange Documents and to issue the Securities in accordance with the terms hereof, (ii) the execution and delivery of the Exchange Documents by the Company and the consummation by the Company of the transactions contemplated hereby, including, without limitation, the issuance of the Securities, have been duly authorized by the Company’s Board of Directors and no further consent or authorization is required by the Company, its Board of Directors or its stockholders, (iii) the Exchange Documents have been duly executed and delivered by the Company, (iv) the Exchange Documents constitute the valid and binding obligations of the Company enforceable against the Company in accordance with its terms, except as such enforcement may be limited by the United States Bankruptcy Code and laws effecting creditors’ rights, generally, and (v) the Company’s signatory has full corporate or other requisite authority to execute the Exchange Documents and to bind the Company. The Company’s Board of Directors has duly adopted a resolution authorizing this Agreement and ratifying its terms, as indicated by the “Secretary’s Certificate” attached hereto as Exhibit B.  

6.3.

Issuance of Securities. The issuance of the Securities is duly authorized and the Securities are and will be, upon issuance, free and clear of all taxes, liens, claims, pledges, mortgages, restrictions, obligations, security interests and encumbrances of any kind, nature and description other than liens in favor of Holder, and when issued will be validly issued, fully paid and non-assessable.

6.4.

No Conflicts. The execution and delivery by the Company of, and the performance by the Company of its obligations under this Agreement in accordance with the terms of this Agreement will not contravene any provision of applicable law or the charter documents of the Company or any agreement or other instrument binding upon the Company, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement in accordance with the terms of this Agreement.

6.5.

SEC Documents: Financial Statements. None of the Company’s filings (“SEC Documents”) filed with the SEC contained, at the time they were filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. Since August 12, 2015, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  

6.6.

Brokers. The Company has taken no action which would give rise to any claim by any person for a brokerage commission, placement agent or finder’s fees or similar payments by

3

Holder relating to this Agreement or the transactions contemplated hereby.  The Company shall indemnify and hold harmless each of Holder, its employees, officers, directors, stockholders, managers, agents, attorneys, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses suffered in respect of any such claimed or existing fees.

6.7.

Authorization and Issuance.  The Prior Note was authorized by all necessary company action and validly issued and executed, and the Company’s signatory had full corporate or other requisite authority to execute such agreements and to bind the Company.

6.8.

Holding Period. After due inquiry, the Company represents and warrants that at all times, the Company has complied in all material respects with all applicable securities and other applicable laws in relation with the issuance, holding and transfers of the Prior Note. To the Company’s knowledge, no violation of securities and other applicable laws occurred in connection with the acquisition, issuance, or holding of the Prior Note.

6.9.

No Modifications. Other than the Amendment, no written document, agreement, instrument, contract, amendment or modification to the Prior Note exists that supplements, modifies, or amends the terms set forth in the Prior Note.

6.10.

Absence of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company, the Common Stock or any of the Company’s subsidiaries, wherein an unfavorable decision, ruling or finding would have a material adverse effect on the Company or its operations.

6.11.

No Additional Consideration. The Company has not received any cash or property consideration in any form whatsoever for entering into this Agreement, other than the surrender of the Prior Note.

6.12.

Recitals.  All of the information, facts and representations set forth in the Recitals section of this Agreement are in all respects true and accurate as of the date hereof and are incorporated as representations and warranties of the Company as if set forth in this Section 6.

6.13.

Issuer Status. Until the full repayment of the Exchange Note, the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would otherwise permit such termination.

6.14.

Acknowledgement of Obligations. The Company hereby acknowledges, confirms and agrees that the obligations of the Company to Holder under the Exchange Note are unconditionally owed by the Company to Holder without offset, defense or counterclaim of any kind, nature or description whatsoever.

6.15.

Termination. The Purchase Agreement and all other Transaction Documents (as defined in the Purchase Agreement) are hereby terminated with respect to the Prior Note, but remain in full force and effect with respect to the Exchange Note. All references in the Transaction Documents to the Prior Note shall hereafter be deemed to be references to the Exchange Note.      

7.

Deliverables; Exchange Documents. Together with its execution of this Agreement, the Company shall execute and deliver the Secretary’s Certificate. This Agreement, the Secretary’s Certificate, the Exchange Note, and any other documents, agreements, or instruments entered into or

4

delivered in connection with this Agreement, or any amendments to any of the foregoing, are collectively referred to as the “Exchange Documents”. For the avoidance of doubt, all of the Transaction Documents entered into by the parties in connection with the Purchase Agreement (other than the Prior Note) shall continue to apply to the Exchange Note as if the Exchange Note was issued concurrently therewith.

8.

Releases and Waivers.

8.1.

Upon the full repayment of the Exchange Note (referred to as “Payment in Full”), Holder releases and forever discharges the Company of and from any and all manner of actions, suits, debts, sums of money, contracts, agreements, claims and demands at law or in equity, that Holder had, or may have arising from the Prior Note.

8.2.

The Company hereby affirms that the obligations under the Exchange Note and as set forth herein are valid and binding obligations of the Company, and hereby waives, to the fullest extent allowable under law, any and all defenses that may be available to a debtor under applicable state and federal law including, without limiting the foregoing, any and all defenses available to a debtor or maker under the provisions of the Uniform Commercial Code pertaining to negotiable instruments.

8.3.

Upon execution of this Agreement, the Company releases and forever discharges Holder of and from any and all manner of actions, suits, debts, sums of money, contracts, agreements, claims and demands at law or in equity, that the Company had, or may have arising from the Prior Note.

9.

Miscellaneous. The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Exchange Documents as if these terms were fully set forth therein.

9.1.

Governing Law; Venue. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Utah without regard to the principles of conflict of laws. Each party consents to and expressly agrees that the exclusive venue for arbitration of any dispute arising out of or relating to this Agreement or the relationship of the parties or their affiliates shall be in Salt Lake County, Utah. Without modifying the parties’ obligations to resolve disputes hereunder pursuant to the Arbitration Provisions (as defined in the Purchase Agreement), each party hereto submits to the exclusive jurisdiction of any state or federal court sitting in Salt Lake County, Utah in any proceeding arising out of or relating to this Agreement and agrees that all Claims (as defined in the Arbitration Provisions) in respect of the proceeding may only be heard and determined in any such court and hereby expressly submits to the exclusive personal jurisdiction and venue of such court for the purposes hereof and expressly waives any claim of improper venue and any claim that such courts are an inconvenient forum. Each party hereto hereby irrevocably consents to the service of process of any of the aforementioned courts in any such proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to its address as set forth in the Purchase Agreement, such service to become effective ten (10) days after such mailing.

9.2.

Arbitration of Claims. Each party agrees that any dispute arising out of or relating to this Agreement or any other Exchange Document shall be subject to the Arbitration Provisions.

9.3.

Successors and Assigns; Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto. Except as otherwise expressly provided herein, no person other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement.

9.4.

Pronouns.  All pronouns and any variations thereof in this Agreement refer to the masculine, feminine or neuter, singular or plural, as the context may permit or require.

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9.5.

Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. The parties hereto confirm that any electronic copy of another party’s executed counterpart of this Agreement (or its signature page thereof) will be deemed to be an executed original thereof.

9.6.

Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

9.7.

Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such provision shall be modified to achieve the objective of the parties to the fullest extent permitted and such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction.

9.8.

Entire Agreement. This Agreement, together with the Exchange Note, the other Exchange Documents, and the Transaction Documents, constitutes and contains the entire agreement between the parties hereto, and supersedes all prior oral or written agreements and understandings between Holder, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor Holder makes any representation, warranty, covenant or undertaking with respect to such matters.

9.9.

No Reliance. The Company acknowledges and agrees that neither Holder nor any of its officers, directors, members, managers, representatives or agents has made any representations or warranties to the Company or any of its officers, directors, stockholders, agents, representatives, or employees except as expressly set forth in the Exchange Documents and, in making its decision to enter into the transactions contemplated by the Exchange Documents, the Company is not relying on any representation, warranty, covenant or promise of Holder or its officers, directors, members, managers, agents or representatives other than as set forth in the Exchange Documents.

9.10.

Amendment. Any amendment, supplement or modification of or to any provision of this Agreement, shall be effective only if it is made or given by an instrument in writing (excluding any email message) and signed by the Company and Holder.

9.11.

No Waiver. No forbearance, failure or delay on the part of a party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Any waiver of any provision of this Agreement shall be effective (a) only if it is made or given in writing (including an email message) and (b) only in the specific instance and for the specific purpose for which made or given.

9.12.

Assignment. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of Holder, which consent may be withheld at the sole discretion of Holder; provided, however, that in the case of a merger, sale of substantially all of the Company’s assets or other corporate reorganization, Holder shall not unreasonably withhold, condition or delay such consent. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, including its financing sources, in whole or in part.

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9.13.

Advice of Counsel. In connection with the preparation of this Agreement and all other Exchange Documents, each of the Company, its stockholders, officers, agents, and representatives acknowledges and agrees that the attorney that prepared this Agreement and all of the other Exchange Documents acted as legal counsel to Holder only.  Each of the Company, its stockholders, officers, agents, and representatives (a) hereby acknowledges that he/she/it has been, and hereby is, advised to seek legal counsel and to review this Agreement and all of the other Exchange Documents with legal counsel of his/her/its choice, and (b) either has sought such legal counsel or hereby waives the right to do so.  

9.14.

No Strict Construction. The language used in this Agreement is the language chosen mutually by the parties hereto and no doctrine of construction shall be applied for or against any party.

9.15.

Attorneys’ Fees.  In the event of any action at law or in equity to enforce or interpret the terms of this Agreement or any of the other Exchange Documents, the parties agree that the party who is awarded the most money (which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any party) shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of the full amount of the attorneys’ fees and expenses paid by such prevailing party in connection with the litigation and/or dispute without reduction or apportionment based upon the individual claims or defenses giving rise to the fees and expenses.  Nothing herein shall restrict or impair a court’s power to award fees and expenses for frivolous or bad faith pleading.

9.16.

Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER EXCHANGE DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY.  THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHT TO DEMAND TRIAL BY JURY.

9.17.

Further Assurances. Each party shall do and perform or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

9.18.

Notices. Unless otherwise specifically provided for herein, all notices, demands or requests required or permitted under this Agreement to be given to the Company or Holder shall be given as set forth in the “Notices” section of the Purchase Agreement.

9.19.

Survival of Representations and Warranties. All of the representations and warranties made herein shall survive the execution and delivery of this Agreement for the maximum time allowable by applicable law.

9.20.

Transaction Fees. Each party shall be responsible for its own attorneys’ fees and other costs and expenses associated with documenting and closing the transaction contemplated by this Agreement.

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9.21.

Specific Performance. The Company and Holder acknowledge and agree that irreparable damage would occur in the event that any provision of this Agreement or any of the other Exchange Documents were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions, without (except as specified in the Arbitration Provisions) the necessity to post a bond, to prevent or cure breaches of the provisions of this Agreement or such other Exchange Document and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which any of them may be entitled by law or equity.

9.22.

Time is of the Essence. Time is expressly made of the essence of each and every provision of this Agreement and the Exchange Documents.

9.23.

Voluntary Agreement. The Company has carefully read this Agreement and each of the other Exchange Documents and has asked any questions needed for the Company to understand the terms, consequences and binding effect of this Agreement and each of the other Exchange Documents and fully understand them. The Company has had the opportunity to seek the advice of an attorney of the Company’s choosing, or has waived the right to do so, and is executing this Agreement and each of the other Exchange Documents voluntarily and without any duress or undue influence by Investor or anyone else.

[Remainder of the page intentionally left blank; signature page to follow]

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IN WITNESS WHEREOF, each of the undersigned represents that the foregoing statements made by it above are true and correct and that it has caused this Exchange Agreement to be duly executed on its behalf (if an entity, by one of its officers thereunto duly authorized) as of the date first above written.

HOLDER:

ILIAD RESEARCH AND TRADING, L.P.

By: Iliad Management, LLC, it General Partner

By: Fife Trading, Inc., its Manager

       By: /s/ John M. Fife

       John M. Fife, President

COMPANY:

VAPOR HUB INTERNATIONAL INC.

By:

/s/ Lori Winther  

Name: Lori Winther

Title: Chief Financial Officer

ATTACHMENTS:

Exhibit A

Exchange Note

Exhibit B

Secretary’s Certificate

[Signature Page to Exchange Agreement]

EX-10

THIS NOTE (AS DEFINED BELOW) IS ISSUED IN EXCHANGE FOR (WITHOUT ANY ADDITIONAL CONSIDERATION) THAT CERTAIN PROMISSORY NOTE IN THE ORIGINAL PRINCIPAL AMOUNT OF $245,000.00 HAVING AN ORIGINAL ISSUE DATE OF AUGUST 12, 2015. FOR PURPOSES OF RULE 144 (AS DEFINED IN THE EXCHANGE AGREEMENT (AS DEFINED BELOW)), THIS NOTE SHALL BE DEEMED TO HAVE BEEN ISSUED ON AUGUST 12, 2015.

CONVERTIBLE PROMISSORY NOTE

U.S. $272,250.00

“Original Issue Date”: August 12, 2015

FOR VALUE RECEIVED, VAPOR HUB INTERNATIONAL INC., a Nevada corporation (“Borrower”), promises to pay in lawful money of the United States of America to the order of ILIAD RESEARCH AND TRADING, L.P., a Utah limited partnership, or its successors or assigns (“Lender”), the principal sum of $272,250.00, together with all other amounts due under this Convertible Promissory Note (this “Note”). This Note is issued pursuant to that certain Exchange Agreement with an effective date of April 15, 2016 (the “Exchange Date”), as the same may be amended from time to time (the “Exchange Agreement”), by and between Borrower and Lender, pursuant to which Lender exchanged the Prior Note (as defined in the Exchange Agreement) for this Note, pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended.

1.

TRANSACTION DOCUMENTS. Borrower and Lender agree that the terms and provisions of the Purchase Agreement (as defined in the Exchange Agreement) and the other Transaction Documents (as defined in the Purchase Agreement) shall be deemed to apply in all respects to this Note. All references in the Purchase Agreement and the other Transaction Documents to the term “Note” shall be deemed to mean and refer to this Note and not the Prior Note.

2.

PAYMENT. Provided there is an outstanding balance (the “Outstanding Balance”) on the Initial Payment Date (as defined below), within three (3) Trading Days thereafter Borrower shall deliver to Lender a number of Conversion Shares (as defined below) to be determined in accordance with the provisions of Section 6. Borrower shall pay to Lender the entire remaining Outstanding Balance of this Note in cash on or before July 15, 2016 (the “Maturity Date”). Borrower will make all payments of sums due hereunder to Lender at Lender’s address set forth in the Purchase Agreement, or at such other place as Lender may designate in writing. Unless otherwise agreed or required by applicable law, payments will be applied first to any unpaid collection costs and late charges, then to accrued interest and finally to principal.

3.

INTEREST. Interest shall accrue on the Outstanding Balance of this Note at the rate of ten percent (10%) per annum from the Exchange Date until the same is paid in full; provided, however, that upon the occurrence of an Event of Default (as defined below), the Outstanding Balance of this Note shall, upon written notice from Lender to Borrower, bear interest at the lesser of the rate of eighteen percent (18%) per annum or the maximum rate permitted by applicable law, and calculated on the basis of a 360-day year, from the date the applicable Event of Default occurred until paid.

4.

EXCHANGE FEE; ORIGINAL ISSUE DISCOUNT; TRANSACTION EXPENSES. As set forth in the Exchange Agreement, Borrower agreed to pay an Exchange Fee (as defined in the Exchange Agreement) in the amount of $24,750.00, which Exchange Fee is included in the principal balance of this Note and is fully earned as of the Exchange Date. In addition, in connection with the Prior Note, Borrower agreed to pay $40,000.00 as an original issue discount and $5,000.00 to Lender to cover Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of the Prior Note, all of which amounts were included in the initial principal balance of

the Prior Note and are included in the initial principal balance of this Note, and all of which amounts are fully earned and payable as of the date hereof.

5.

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments of less than all principal, fees and interest outstanding will not, unless agreed to by Lender in writing, relieve Borrower of any of Borrower’s obligations hereunder.

6.

CONVERSION PAYMENT.

6.1.

Conversion Price. The conversion price for the conversion payment (the “Conversion”) due under this Note (the “Conversion Price”) pursuant to Section 6.2 below shall be equal to 70% (the “Conversion Factor”) of the average of the three (3) lowest Closing Bid Prices (as defined below) in the twenty (20) Trading Days (as defined below) immediately preceding the Conversion.

6.2.

Conversion Payment. Within three (3) Trading Days of June 15, 2016 (the “Initial Payment Date”), Borrower shall deliver to Lender a number of shares of fully paid and non-assessable common stock, $0.001 par value per share (“Common Stock”), of Borrower equal to $50,000.00 divided by the Conversion Price as of the Initial Payment Date (the “Conversion Shares”). Lender will provide to Borrower a conversion notice in the form attached hereto as Exhibit A (the “Conversion Notice”) by any method of Lender’s choice (including but not limited to facsimile, email, mail, overnight courier, or personal delivery), which Conversion Notice shall set forth the number of Conversion Shares deliverable to Lender with respect to the Conversion. Borrower shall deliver the Conversion Shares to Lender in accordance with Section 6.3 below.

6.3.

Method of Conversion Share Delivery. On or before the close of business on the third (3^rd) Trading Day following the Initial Payment Date (the “Delivery Date”), Borrower shall, provided it is DWAC Eligible (as defined below) at such time, deliver or cause its transfer agent to deliver the Conversion Shares electronically via DWAC (as defined below) to the account designated by Lender in the Conversion Notice. If Borrower is not DWAC Eligible, it shall deliver to Lender or its broker (as designated in the Conversion Notice), via reputable overnight courier, a certificate representing the number of shares of Common Stock equal to the number of Conversion Shares to which Lender shall be entitled, registered in the name of Lender or its designee. For the avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by the Delivery Date unless Lender or its broker, as applicable, has actually received the certificate representing the Conversion Shares no later than the close of business on the Delivery Date pursuant to the terms set forth above. Moreover, and notwithstanding anything to the contrary herein or in any other Transaction Document, in the event Borrower or its transfer agent refuses to deliver the Conversion Shares to Lender on grounds that such issuance is in violation of Rule 144, Borrower shall deliver or cause its transfer agent to deliver the Conversion Shares to Lender with a restricted securities legend, but otherwise in accordance with the provisions of this Section 6.3. In conjunction therewith, Borrower will also deliver to Lender a written opinion from its counsel or its transfer agent’s counsel opining as to why the issuance of the Conversion Shares violates Rule 144.

6.4.

True-Up. On the date that is twenty (20) Trading Days (a “True-Up Date”) from the date the Conversion Shares become Free Trading (as defined below), there shall be a true-up where Borrower shall deliver to Lender additional Conversion Shares (“True-Up Shares”) if the Conversion Price as of the True-Up Date is less than the Conversion Price used in the Conversion Notice. In such event, Borrower shall deliver to Lender within three (3) Trading Days of the True-Up Date (the “True-Up Share Delivery Date”) a number of True-Up Shares equal to the difference between the number of Conversion Shares that would have been delivered to Lender on the True-Up Date based on the Conversion Price as of the True-Up Date and the number of Conversion Shares originally delivered to Lender pursuant to the Conversion Notice. For the avoidance of doubt, if the Conversion Price as of the True-Up Date is higher

2

than the Conversion Price set forth in the Conversion Notice, then Borrower shall have no obligation to deliver True-Up Shares to Lender, nor shall Lender have any obligation to return any excess Conversion Shares to Borrower under any circumstance. For the convenience of Borrower only, Lender may, in its sole discretion, deliver to Borrower a notice (pursuant to a form of notice substantially in the form attached hereto as Exhibit B) informing Borrower of the number of True-Up Shares it is obligated to deliver to Lender as of any given True-Up Date, provided that if Lender does not deliver any such notice Borrower shall not be relieved of its obligation to deliver True-Up Shares pursuant to this Section 6.4. Notwithstanding the foregoing, if Borrower fails to deliver any required True-Up Shares on or before the True-Up Share Delivery Date, then in such event the Outstanding Balance of this Note will automatically increase (under Lender’s and Borrower’s expectations that any such increase will tack back to the Original Issue Date for purposes of determining the holding period under Rule 144) by a sum equal to the number of True-Up Shares deliverable as of the True-Up Date multiplied by the Conversion Price for the Common Stock as of the True-Up Date.

6.5.

Ownership Limitation. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents, if at any time Lender shall or would be issued shares of Common Stock under any of the Transaction Documents, but such issuance would cause Lender (together with its affiliates) to beneficially own a number of shares exceeding 9.99% of the number of shares of Common Stock outstanding on such date (including for such purpose the shares of Common Stock issuable upon such issuance) (the “Maximum Percentage”), then Borrower must not issue to Lender shares of Common Stock which would exceed the Maximum Percentage. For purposes of this section, beneficial ownership of Common Stock will be determined pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended. The shares of Common Stock issuable to Lender that would cause the Maximum Percentage to be exceeded are referred to herein as the “Ownership Limitation Shares”. Borrower will reserve the Ownership Limitation Shares for the exclusive benefit of Lender. From time to time, Lender may notify Borrower in writing of the number of the Ownership Limitation Shares that may be issued to Lender without causing Lender to exceed the Maximum Percentage. Upon receipt of such notice, Borrower shall be unconditionally obligated to immediately issue such designated shares to Lender, with a corresponding reduction in the number of the Ownership Limitation Shares. By written notice to Borrower, Lender may increase, decrease or waive the Maximum Percentage as to itself but any such waiver will not be effective until the 61st day after delivery thereof. The foregoing 61-day notice requirement is enforceable, unconditional and non-waivable and shall apply to all affiliates and assigns of Lender.

6.6.

Certain Definitions. Certain terms used in this Section 6 are defined as follows:

(a)

“Bloomberg” means Bloomberg L.P. (or if that service is not then reporting the relevant information regarding the Common Stock, a comparable reporting service of national reputation selected by Lender and reasonably satisfactory to Borrower).

(b)

“Closing Bid Price” and “Closing Trade Price” means the last closing bid price and last closing trade price, respectively, for the Common Stock on its principal market, as reported by Bloomberg, or, if its principal market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then the last bid price or last trade price, respectively, of the Common Stock prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if its principal market is not the principal securities exchange or trading market for the Common Stock, the last closing bid price or last trade price, respectively, of the Common Stock on the principal securities exchange or trading market where the Common Stock is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of the Common Stock in the over-the-counter market on the electronic bulletin board for the Common Stock as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for the

3

Common Stock by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for the Common Stock as reported by OTC Markets Group, Inc., and any successor thereto.

(c)

 “DTC” means the Depository Trust Company or any successor thereto.

(d)

“DTC/FAST Program” means DTC’s Fast Automated Securities Transfer program.

(e)

“DWAC” means the DTC’s Deposit/Withdrawal at Custodian system.

(f)

“DWAC Eligible” means that (i) Borrower’s Common Stock is eligible at DTC for full services pursuant to DTC’s operational arrangements, including without limitation transfer through DTC’s DWAC system, (ii) Borrower has been approved (without revocation) by DTC’s underwriting department, (iii) Borrower’s transfer agent is approved as an agent in the DTC/FAST Program, (iv) the Conversion Shares are otherwise eligible for delivery via DWAC; (v) Borrower has previously delivered all Conversion Shares to Lender via DWAC; and (vi) Borrower’s transfer agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.

(g)

“Free Trading” means that (i) the Conversion Shares have been cleared and approved for public resale by the compliance departments of Lender’s brokerage firm and the clearing firm servicing such brokerage, and (ii) such Conversion Shares are held in the name of the clearing firm servicing Lender’s brokerage firm and have been deposited into such clearing firm’s account for the benefit of Lender.

(h)

“Trading Day” means any day on which the New York Stock Exchange is open for trading.

7.

EVENT OF DEFAULT. The occurrence and continuance of any of the following shall constitute an “Event of Default” under this Note:

7.1.

Failure to Pay. Borrower shall fail to pay when due, whether at stated maturity, upon acceleration or otherwise, any principal or interest payment, or any other payment required under the terms of this Note on the date due.  

7.2.

Failure to Deliver Conversion Shares. Borrower shall fail to deliver any Conversion Shares to Lender in accordance with the terms hereof.

7.3.

Breaches of Covenants. Borrower or any other person or entity fails to comply with or to perform when due any other term, obligation, covenant, or condition contained in this Note, in the Purchase Agreement, in the Exchange Agreement, any other Transaction Document, or in any other agreement securing payment of this Note.

7.4.

Representations and Warranties. Any representation or warranty made by Borrower to Lender in this Note, the Purchase Agreement, the Exchange Agreement, any other Transaction Document, or any related agreement shall be materially false, incorrect, incomplete or misleading in any material respect when made or furnished.

7.5.

Voluntary Bankruptcy or Insolvency Proceedings. Borrower shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, or

4

(v) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it.

7.6.

Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator, or custodian of Borrower or of all or a substantial part of its property, or an involuntary case or other proceedings seeking liquidation, reorganization, or other relief with respect to Borrower or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty (60) days of commencement.

7.7.

Government Action. If any governmental or regulatory authority takes or institutes any action that will materially affect Borrower’s financial condition, operations or ability to pay or perform Borrower’s obligations under this Note.

7.8.

Judgment. A judgment or judgments for the payment of money in excess of the sum of $100,000.00 in the aggregate shall be rendered against Borrower and either (i) the judgment creditor executes on such judgment or (ii) such judgment remains unpaid or undischarged for more than sixty (60) days from the date of entry thereof or such longer period during which execution of such judgment shall be stayed during an appeal from such judgment.

7.9.

Attachment. Any execution or attachment shall be issued whereby any substantial part of the property of Borrower shall be taken or attempted to be taken and the same shall not have been vacated or stayed within thirty (30) days after the issuance thereof.

7.10.

Failure to Make Required Filings. Borrower shall become delinquent in its filing requirements as a fully-reporting issuer registered with the United States Securities and Exchange Commission.

7.11.

Trading Suspension. Trading in Borrower’s Common Stock shall be suspended, halted, frozen, chilled, reach zero bid or shall otherwise cease trading on Borrower’s principal trading market.

7.12.

Cross Default. Borrower breaches or any event of default occurs under any term or provision of any Other Agreement (as defined hereafter), which breach or default, if capable of being cured, is not cured within ten (10) days following delivery of written notice of such breach or default by Lender to Borrower. For purposes hereof, “Other Agreement” means collectively, (i) all existing and future agreements and instruments between, among or by Borrower (or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand, and (ii) any financing agreement or a material agreement that affects Borrower’s ongoing business operations, excluding in both cases the Transaction Documents.

8.

ACCELERATION; REMEDIES.

8.1.

At any time following the occurrence of an Event of Default (other than an Event of Default referred to in Sections 7.5 and 7.6), Lender may, by written notice to Borrower, declare all unpaid principal, plus all accrued interest and other amounts due hereunder to be immediately due and payable at the Mandatory Default Amount (as defined below) without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described in Sections 7.5 and 7.6, immediately and without notice, all outstanding unpaid principal, plus all accrued interest and

5

other amounts due hereunder shall automatically become immediately due and payable at the Mandatory Default Amount, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Lender may exercise any other right, power or remedy permitted to it by law, either by suit in equity or by action at law, or both. For purposes hereof, the term “Mandatory Default Amount” means an amount equal to 115% of the Outstanding Balance of this Note as of the date the Event of Default occurred, plus all interest, fees, and charges that may accrue on such Outstanding Balance thereafter.

8.2.

Upon the occurrence of a Change in Control (as defined below), and without further notice to Borrower, all unpaid principal, plus all accrued interest and other amounts due hereunder, shall become immediately due and payable. For purposes hereof, a “Change in Control” means a sale of all or substantially all of a Borrower’s assets, or a merger, consolidation, significant equity financing, or other capital reorganization of Borrower with or into another company; provided however that a merger, consolidation, significant equity financing, or other capital reorganization in which the holders of more than fifty percent (50%) of the equity of Borrower outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of such Borrower, or such surviving entity, outstanding immediately after such transaction shall not constitute a Change in Control.

9.

UNCONDITIONAL OBLIGATION; NO OFFSET. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has or may have hereafter against Lender, its successors and assigns, and agrees to make all payments due hereunder in accordance with the terms of this Note.

10.

NO USURY. Notwithstanding any other provision contained in this Note or in any instrument given to evidence the obligations evidenced hereby: (a) the rates of interest and charges provided for herein and therein shall in no event exceed the rates and charges which result in interest being charged at a rate equaling the maximum allowed by law; and (b) if, for any reason whatsoever, Lender ever receives as interest in connection with the transaction of which this Note is a part an amount which would result in interest being charged at a rate exceeding the maximum allowed by law, such amount or portion thereof as would otherwise be excessive interest shall automatically be applied toward reduction of the unpaid principal balance then outstanding hereunder and not toward payment of interest.

11.

ATTORNEYS’ FEES. If this Note is placed in the hands of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Lender otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note, then Borrower shall pay the costs incurred by Lender for such collection, enforcement or action including, without limitation, reasonable attorneys’ fees and disbursements.

12.

GOVERNING LAW; VENUE. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Utah. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference.

6

13.

ARBITRATION OF DISPUTES. Borrower agrees that any dispute arising under this Note shall be subject to the Arbitration Provisions (as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.

14.

WAIVERS. Borrower hereby waives presentment, notice of nonpayment, notice of dishonor, protest, demand and diligence.

15.

LOSS OR MUTILATION. On receipt by Borrower of evidence reasonably satisfactory to Borrower of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction of this Note, on delivery of an indemnity agreement reasonably satisfactory in form and amount to Borrower or, in the case of any such mutilation, on surrender and cancellation of such Note, Borrower at its expense will execute and deliver, in lieu thereof, a new Note of like tenor.

16.

NOTICES. Any notice required or permitted hereunder shall be given in the manner provided in the subsection titled “Notices” in the Purchase Agreement, the terms of which are incorporated herein by this reference.

17.

AMENDMENT AND WAIVER. This Note and its terms and conditions may be amended, waived or modified only in writing by Borrower and Lender.

18.

SEVERABILITY. If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of the parties to the fullest extent permitted and the balance of this Note shall remain in full force and effect.

19.

ASSIGNMENTS. Borrower may not assign this Note without the prior written consent of Lender. This Note may be offered, sold, assigned or transferred by Lender without the consent of Borrower.

20.

FINAL NOTE. This Note, together with the Exchange Agreement and the other Transaction Documents, contains the complete understanding and agreement of Borrower and Lender and supersedes all prior representations, warranties, agreements, arrangements, understandings, and negotiations. THIS NOTE, TOGETHER WITH THE EXCHANGE AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

21.

WAIVER OF JURY TRIAL. BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, BORROWER ACKNOWLEDGES THAT IT KNOWINGLY AND VOLUNTARILY IS WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

22.

TIME IS OF THE ESSENCE. Time is of the essence of this Note and each and every provision hereof in which time is an element.

23.

LIQUIDATED DAMAGES. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note, Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’ inability to predict future interest rates and

7

other relevant factors. Accordingly, Lender and Borrower agree that any fees, balance adjustments, default interest or other charges assessed under this Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages.

 [Remainder of page intentionally left blank]

8

IN WITNESS WHEREOF, Borrower has caused this Note to be issued as of the date first set forth above.

BORROWER:

VAPOR HUB INTERNATIONAL INC.

By:

Name:

Title:

[Signature Page to Convertible Promissory Note]

EXHIBIT A

Iliad Research and Trading, L.P.

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

Vapor Hub International Inc.

Date: __________________

Attn: _________________

1871 Tapo Street

Simi Valley, California 93063

CONVERSION NOTICE

The above-captioned Lender hereby gives notice to Vapor Hub International Inc., a Nevada corporation (the “Borrower”), pursuant to that certain Convertible Promissory Note made by Borrower in favor of Lender with an original issue date of August 12, 2015 (the “Note”), that Lender elects to convert the portion of the Note balance set forth below into fully paid and non-assessable shares of Common Stock of Borrower as of the date of conversion specified below. Said conversion shall be based on the Conversion Price set forth below. In the event of a conflict between this Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole discretion, Lender may provide a new form of Conversion Notice to conform to the Note. Capitalized terms used in this notice without definition shall have the meanings given to them in the Note.

A.

Date of Conversion:

____________

B.

Conversion #:

 ____________

C.

Conversion Amount:

 ____________

D.

Conversion Price:  _______________

E.

Conversion Shares:  _______________ (C divided by D)

F.

Remaining Outstanding Balance of Note:  ____________*  

* Subject to adjustments for corrections, defaults, interest and other adjustments permitted by the Transaction Documents (as defined in the Purchase Agreement), the terms of which shall control in the event of any dispute between the terms of this Conversion Notice and such Transaction Documents.

Please transfer the Conversion Shares electronically (via DWAC) to the following account:

Broker:  

Address:

DTC#:  

Account #:  

Account Name:  

To the extent the Conversion Shares are not able to be delivered to Lender electronically via the DWAC system, deliver all such certificated shares to Lender via reputable overnight courier after receipt of this Conversion Notice (by facsimile transmission or otherwise) to:

_____________________________________

_____________________________________

_____________________________________

[Remainder of page intentionally left blank]

Sincerely,

Lender:

ILIAD RESEARCH AND TRADING, L.P.

By: Iliad Management, LLC, it General Partner

     By: Fife Trading, Inc., its Manager

            By:

                   John M. Fife, President

EXHIBIT B

Iliad Research and Trading, L.P.

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

Vapor Hub International Inc.

Date: __________________

Attn: _________________

1871 Tapo Street

Simi Valley, California 93063

TRUE-UP NOTICE

The above-captioned Lender hereby gives notice to Vapor Hub International Inc., a Nevada corporation (the “Borrower”), pursuant to that certain Convertible Promissory Note made by Borrower in favor of Lender with an original issue date of August 12, 2015 (the “Note”), of True-Up Conversion Shares related to the June 15, 2016 (the “Initial Payment Date”) Conversion Notice. In the event of a conflict between this True-Up Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its sole discretion, Lender may provide a new form of True-Up Notice to conform to the Note. Capitalized terms used in this notice without definition shall have the meanings given to them in the Note.

TRUE-UP CONVERSION SHARES AND CERTIFICATIONS

AS OF THE TRUE-UP DATE

A.

Initial Payment Date: June 15, 2016

B.

True-Up Date: ____________, 201_

C.

Conversion Amount:

$50,000.00

D.

True-Up Conversion Price:  _______________ (lower of (i) Conversion Price in effect and (ii) Conversion Price as of True-Up Date)

E.

True-Up Conversion Shares:  _______________ (C divided by D)

F.

Conversion Shares delivered: ________________

G.

True-Up Conversion Shares to be delivered: ________________ (only applicable if E minus F is greater than zero)

[Remainder of page intentionally left blank]

Sincerely,

Lender:

ILIAD RESEARCH AND TRADING, L.P.

By: Iliad Management, LLC, it General Partner

     By: Fife Trading, Inc., its Manager

            By:

                   John M. Fife, President

ACKNOWLEDGED AND CERTIFIED BY:

Borrower:

VAPOR HUB INTERNATIONAL INC.

By:

Name:

Title:

EX-16

Exhibit 16.1

May 12, 2016

U.S. Securities and Exchange Commission

Office of the Chief Accountant

100 F Street, N.E.

Washington, DC 20549

Commissioners:

We have read Item 4.01 of Form 8-K, dated May 12, 2016, of Vapor Hub International, Inc. and agree with the statements concerning our Firm contained therein.

Very truly yours,

/s/ Hartley Moore Accountancy Corporation

Hartley Moore Accountancy Corporation